Flaws in
the designs of microprocessors, which go through rigorous testing and
verification, are usually easily fixed by patches in the code that they
use to communicate with the rest of the computer. But if the error can’t
be fixed easily in software, it could be necessary to redesign the
chip, which can be extremely costly and time consuming.

Intel is expected to release a statement, but hasn’t yet
commented on the issue. Historically, the way companies respond to such
issues and how quickly they address them has determined how big the
problem becomes.

“This
is a potential PR nightmare,” said Dan Ives, head of tech research at
GBH Insights. “They need to get ahead of this and try to contain any of
the damage to customers as well to the brand.”

The report hit Intel shares, which fell as much as 5.5 percent, the steepest drop since October 2016. It gave a boost to rivals Advanced Micro Devices Inc., which surged as much as 8.8 percent, and Nvidia Corp., which jumped 6.3 percent.

The
vulnerability may have consequences beyond just computers, and may not
be the result of a design or testing error. All modern microprocessors,
including those that run smartphones, are built to essentially guess
what functions they’re likely to be asked to run next. By queuing up
possible executions in advance, they’re able to crunch data and run
software much faster.

The problem in this case, according to
people familiar with the issue, is that this predictive loading of
instructions allows access to data that’s normally cordoned
offsecurely.That means, in theory, that malicious code could find a
way to access information that would otherwise be out of reach, such as
passwords.

Chip design flaws are exceedingly rare. More than 20 years ago, a
college professor discovered a problem with how early versions of
Intel’s Pentium chip calculated numbers. Rival International Business
Machines Corp. was able to make use of the finding and claim Intel
products would cause frequent problems for consumers’ computers. While
that didn’t happen, Intel had to recall some chips and took a charge of
more than $400 million.